Retirement assets boost T. Rowe Price

Asset manager T. Rowe Price Group (TROW) went public in 1986 and has been a money maker ever since.

The tradition continued with today's third quarter results. The company reported a 27% increase in third-quarter earnings, and shares were up 4.3% to $54.91. The gain was sixth among stocks in the Standard & Poor's 500 Index ($INX).

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Some of the gain was luck. The stock market had its best September since 1939, and the S&P 500 jumped 8.8%.

But T. Rowe Price also benefited from growth in its retirement-related funds. Investors poured a net $2.3 billion into the company's target-date retirement funds during the quarter. Net deposits were $8 billion, helping increase assets under management by 12% from a year earlier to $439.7 billion.

"They are a machine. They are more conservative and more disciplined" than other asset managers, Greggory Warren, an equity analyst at Morningstar, told Bloomberg News.

Net income increased to $168.4 million, or 64 cents a share, from $132.4 million, or 50 cents, a year earlier, the company said. Analysts had expected 60 cents a share.

The company has $53.5 billion, or 12% of its assets, in target-date funds, whose holdings become more conservative as investors near retirement age.

Investors continued to favor bonds over stocks as they poured a net $1.1 billion into T. Rowe mutual funds. Clients deposited $1.8 billion into fixed-income funds while withdrawing $600 million from stock and blended-asset funds, and $100 million from money market funds.

Outside mutual funds, investors deposited $5.9 billion, mainly from institutional clients.

Market appreciation boosted assets by $40.6 billion. Revenue rose 17.6% to $586.1 million. Investment advisory fees jumped 20% to $502.5 million, reflecting the higher assets.

T. Rowe Price shares, however, have been hit by this year's market volatility.

If today's gains hold, the shares will be up about 3% for 2010. That's how much they gained in the first quarter. They tumbled 19.3% in the second quarter, then rebounded by 13.9% in the third quarter. They're up 9.8% this month alone.

Money managers appear to be having a great third quarter. BlackRock (BLK), which is the world's largest money manager, said Tuesday that its third-quarter net income rose 74% to $551 million, or $2.83 a share.

Reason: Its acquisition of Barclays Global Investors more than doubled the assets it oversees. BlackRock shares were up 0.9% to $167.74 today. The shares are off slightly so far in October.

Higher assets helped increase Janus Capital Group's (JNS) net income to $32.5 million even as investors withdrew $2.9 billion in the third quarter, the company said yesterday.

Shares were down 0.3% to $10.82 and are off 1.1% in October.